US Appeals Court Revives Investor Lawsuit Against Binance
In a landmark ruling, the 2nd US Circuit Court of Appeals in Manhattan has revived a lawsuit against the world’s largest cryptocurrency exchange, Binance. Initially dismissed in March 2022, the lawsuit was reinstated, opening a significant chapter in the intersection of cryptocurrency and US securities laws.
Decision Grounds and Implications
In a 3-0 unanimous ruling, the court of appeal ruled in favour of the class action investors that US securities laws could apply to their case. The issue was the non-reversibility of the purchases of the tokens that took place within the United States, meaning that these transactions were subject to domestic rules.
Circuit Judge Alison Nathan noted that the fact that Binance utilized US-based Amazon servers for its functioning was a central aspect. This fact highlighted the exchange’s direct link to US soil, thus questioning Binance’s argument that it falls outside the securities regulation of any nation since it operates in every part of the world.
Legal Precedents and Binance’s Position
This case resurrects some critical issues concerning the jurisdiction and the territorial reach of US securities laws, especially in global digital transactions. Binance has used the Morrison v National Australia Bank case from 2010 to argue that since its operations are conducted outside the US, it should be exempted from US securities laws. Nevertheless, the recent decision begs to differ with this assumption and may act as a forerunner of the way US laws will regulate international crypto exchanges.
Binance’s response to the revived legal action remains unknown as the representatives have not yet provided any commentary on the decision. The legal stance of the crypto exchange has been closely watched, especially after its recent legal issues, such as a guilty plea for breaches of anti-money laundering and sanctions laws, leading to a hefty fine.
Impact on Investors and the Crypto Industry
Investors who lost money from their token purchases with Binance, specifically the seven cryptos named in the lawsuit (ELF, EOS, FUN, ICX, OMG, QSP, and TRX), now have another chance to claim compensation. The claims that Binance did not properly disclose to the investors the risks associated with these tokens are one of the core elements of the lawsuit.
The broad implications for the cryptocurrency industry are huge. This decision may affect the practices of crypto exchanges in the US and the way they disclose the risks of token investments to their customers. Further, it might cause more regulatory oversight and force exchanges to comply with US securities laws regardless of where they primarily operate.
Read Also: Coinbase Records Another Outage as Bitcoin Price Hits ATH
The post US Appeals Court Revives Investor Lawsuit Against Binance appeared first on CoinGape.
Read More
US Appeals Court Revives Investor Lawsuit Against Binance
In a landmark ruling, the 2nd US Circuit Court of Appeals in Manhattan has revived a lawsuit against the world’s largest cryptocurrency exchange, Binance. Initially dismissed in March 2022, the lawsuit was reinstated, opening a significant chapter in the intersection of cryptocurrency and US securities laws.
Decision Grounds and Implications
In a 3-0 unanimous ruling, the court of appeal ruled in favour of the class action investors that US securities laws could apply to their case. The issue was the non-reversibility of the purchases of the tokens that took place within the United States, meaning that these transactions were subject to domestic rules.
Circuit Judge Alison Nathan noted that the fact that Binance utilized US-based Amazon servers for its functioning was a central aspect. This fact highlighted the exchange’s direct link to US soil, thus questioning Binance’s argument that it falls outside the securities regulation of any nation since it operates in every part of the world.
Legal Precedents and Binance’s Position
This case resurrects some critical issues concerning the jurisdiction and the territorial reach of US securities laws, especially in global digital transactions. Binance has used the Morrison v National Australia Bank case from 2010 to argue that since its operations are conducted outside the US, it should be exempted from US securities laws. Nevertheless, the recent decision begs to differ with this assumption and may act as a forerunner of the way US laws will regulate international crypto exchanges.
Binance’s response to the revived legal action remains unknown as the representatives have not yet provided any commentary on the decision. The legal stance of the crypto exchange has been closely watched, especially after its recent legal issues, such as a guilty plea for breaches of anti-money laundering and sanctions laws, leading to a hefty fine.
Impact on Investors and the Crypto Industry
Investors who lost money from their token purchases with Binance, specifically the seven cryptos named in the lawsuit (ELF, EOS, FUN, ICX, OMG, QSP, and TRX), now have another chance to claim compensation. The claims that Binance did not properly disclose to the investors the risks associated with these tokens are one of the core elements of the lawsuit.
The broad implications for the cryptocurrency industry are huge. This decision may affect the practices of crypto exchanges in the US and the way they disclose the risks of token investments to their customers. Further, it might cause more regulatory oversight and force exchanges to comply with US securities laws regardless of where they primarily operate.
Read Also: Coinbase Records Another Outage as Bitcoin Price Hits ATH
The post US Appeals Court Revives Investor Lawsuit Against Binance appeared first on CoinGape.
Read More